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TMI Blog2015 (12) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... n in both these appeals, but facts of A.Y. 2010-11 are slightly different from the facts of 2009-10, therefore, we are first taking up ITA No. 2960/M/2014 for A.Y. 2009- 10. The sum and substance of the grievance of the Revenue is that the Ld. CIT(A) erred in deleting the penalty of Rs. 6,30,28,304/- imposed u/s. 271(1)(c) of the Act. 3. The roots for the levy of penalty lie in the assessment order dated 29.11.2011 made u/s. 143(3) of the Act. The assessee company is engaged in the business of trading in shares and securities and providing financial services. While scrutinizing the return of income, the Assessing Officer noticed that the assessee company was holding opening and closing stock of Rs. 128,51,24,748/-. The AO further found tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of CIT Vs Dharmendra Processors 306 ITR 277 and Dilip Shroff 291 ITR 519, the AO concluded by levying minimum penalty of Rs. 6,30,28,304/-. 4. The assessee strongly agitated the matter before the Ld. CIT(A) and reiterated its contention. After considering the facts and the submissions, the First appellate authority posed a question to itself - Whether the assessee has concealed any particulars of income and submitted inaccurate particulars of income. The Ld. CIT(A) answered this question as under: "To answer this question, it is clear from the facts of the case that the assessee has purchased shares and shown stock-in-trade and also debited the interest paid on borrowed funds to the profit & loss account. The return for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it an investment and profit or loss will be taken under the head Capital Gain which means change of head of income. Thus , it is clearly a legal & debatable issue." 4.1. Having answered the question as mentioned hereinabove and drawing support from the decision of the Hon'ble Supreme Court in the case of CIT Vs Reliance Petro Products Pvt. Ltd. 322 ITR 158, the Ld. CIT(A) deleted the penalty for the year under consideration. 5. Aggrieved by this, the Revenue is before us. 6. The Ld. Departmental Representative strongly supported the findings of the AO and placed reliance on the decision of the Hon'ble High Court of Delhi in the case of CIT Vs Zoom Communication (P) Ltd 327 ITR 510 and on the decision of the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding interest on borrowed capital. By this conduct, the assessee reduced its tax liability. In our considered opinion, this observation of the AO is against the facts of the case. Firstly, the shares were purchased in F.Y. 2007-08 and in assessment year 2008-09, the revenue has accepted the claim of the assessee that it is in the business of trading in shares and securities. For the allegation of filing inaccurate particulars of income, the conduct of the assessee has to be seen on the date of the filing of return of income. On the date of filing of return of income, the assessee had an assessment order for A.Y. 2008-09 accepting assessee's claim of business of trading in shares and securities. Thus on the date of filing of return, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading in shares and securities was accepted by the Revenue authorities even if that order was made u/s. 143(1) of the Act. Till date neither the assessment of A.Y. 2008-09 has been reopened nor any revisionary action u/s. 263 of the Act have been taken by the Commissioner. Considering all these facts in totality, we do not find any reason to interfere with the findings of the Ld. CIT(A). Appeal filed by the Revenue is accordingly dismissed. ITA No. 3028/M/2014 - A.Y. 2010-11 9. As mentioned elsewhere, the facts of this year is slightly different from the facts of immediately preceding assessment year inasmuch as in this year the assessee withdrew the claim of expenditure by filing a revised return of income. The return was revised after k ..... X X X X Extracts X X X X X X X X Extracts X X X X
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